Rockit Apple's future direction at core of court case

A dispute between Havelock North Fruit Company Ltd managing director and majority shareholder Phil Alison and other shareholders has ended up in the High Court.

A dispute on the future direction of the company behind Rockit Apple has made its way to the High Court.

Havelock North Fruit Company Ltd produces the miniature apples, which are sold in tubes around New Zealand, and internationally.

Earlier this month the High Court released its judgment on an application for a priority fixture made by the company's majority shareholder and managing director Phil Alison.

"Fundamental disputes" had arisen between him and the other six shareholders on the future direction and management of the company, and a process was under way where Mr Alison would become sole shareholder.

His application for a priority fixture - fast hearing - on the issue was dismissed by Judge M A Gilbert.

As the matter was before the courts, Mr Alison said he could not comment.

When questioned, he said he was not particularly perturbed by the dismissal, because they had an advanced hearing date for August or September next year.

"It's not a major setback to us," he said.

The judgment stated the dispute between shareholders arose from the signing of a "letter agreement" in June this year, which stated the shareholders would notify Mr Alison by the end of August of a share price at which they would be prepared to sell all of their shares.

This price would have reference to "the shareholder group's assessment of likely maximum realization in a competitive trade sale situation".

Mr Alison would be given eight weeks to unconditionally accept the offer and settle the purchase.

However, Mr Alison contended the price advised by the shareholder group did not accord with the letter agreement.

Proceedings began in September, and pleadings were not settled.

The grounds put forward for a fast hearing in Mr Alison's application were not agreed with by Judge Gilbert. These included ensuring a speedy proceeding, and that business decisions could not be made because of the "standstill" on significant expenditure allegedly agreed to in the letter agreement.

Judge Gilbert said exceptional circumstances must be demonstrated before it could be appropriate to allow one litigant to gain preference over others with a priority fixture.

As the letter agreement recorded business would continue as usual, the judge said while there might be disagreements, there was no indication in the evidence that the board was unable to function and continue to govern the company.

"The directors are all obliged to act appropriately in furthering the company's interests," he stated.

"There is no evidence that the disagreement threatens the company's future prospects."

The proceeding was also "nowhere near ready" for hearing.

Mr Alison said the letter agreement would not be the only matter of the hearing next year, but he could not disclose what else would be heard.

In the interim, the Havelock North business would continue as usual.

The company had been having tremendous success with its products, he said, and the company was working to find a commercial solution, rather than waiting for a legal one.

Mr Alison said they were working to keep their relationships with customers and employees as normal as possible.